Millennials are struggling to buy a home - but is it actually getting easier?

Millennials are finding it challenging to buy a home, but recent developments may be making it easier. Despite feeling disadvantaged, today's first-time buyers have a 25% chance of owning a home, compared to lower odds for previous generations. The core issue is that property prices have outpaced incomes over the years, driven by a shortage of new housing construction. England alone needs around 300,000 new dwellings annually to keep up with population growth, but only 208,000 were added last year.

The housing shortage can be attributed to factors such as inflation, which has increased the cost of raw materials for construction, and the impact of the Ukraine war on material and energy costs. Additionally, a shortage of skilled workers, exacerbated by Brexit, has further strained the construction industry. Strict environmental and safety regulations add to the costs of building, while rising property prices have made it harder for buyers to secure a deposit.

However, some changes are making it easier for millennials to enter the housing market. The ratio between house prices and average incomes has decreased slightly, from nearly 9 times in 2021 to 7.6 times. Moreover, lenders are now more willing to offer larger loans and longer repayment periods, with some mortgages requiring as little as a 5% deposit. Longer mortgage terms, up to 40 years, can also help lower monthly payments.

These developments suggest that, while the road to homeownership remains challenging for millennials, recent shifts in the housing market may be gradually improving their prospects. To truly make it easier to get on the ladder as previous generations experienced, however, the government must continue to incentivize builders to commit to constructing more homes.